Green Veh Strategy

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A detailed 150 page report for green vehicle strategy prepared after 14 industry expert interview,61 Electric car user interview and 54 potential car user interview. The first ever report in India.

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Green Veh Strategy

  1. 1. Faculty Guide Prof.Mithileshwar Jha Gopalakrishnan D (0910021) Mukesh Sharma (0910036) Indian Institute of Management , Bangalore
  2. 2. Profiles of Presenters • Gopalakrishnan D – 8 years in Automotive industry (Maruti Suzuki) – Customer relation and channel management • Mukesh Sharma – 11 Years in Automotive Industry (Maruti Suzuki/Suzuki Motor Corp/Tata Motors) – New Product development and Vehicle R&D Indian Institute of Management , Bangalore
  3. 3. Contents • Motivation behind the work • Introduction • Objective and scope • Methodology • Findings • Discussions and Recommendations Indian Institute of Management , Bangalore
  4. 4. Motivation behind the work • Decreasing fuel increasing cost • Emission norms getting tougher • Mobility requirements getting denser • Alternate fuel research going on • To understand consumer behavior for new sources of mobility • Facilitate academicians and practitioners Indian Institute of Management , Bangalore
  5. 5. Introduction •Global warming •Pollution •Oil dependence Indian Institute of Management , Bangalore
  6. 6. Introduction Indian Automobile sales 2008-09 •Fast growing Indian 25,00,000 automobile market 20,00,000 •Lesser carbon foot Vehicle sales 15,00,000 print Total sales 10,00,000 •Least carbon foot print 5,00,000 for electric cars 0 •Oil conservation in 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 range of 50~100% Indian Institute of Management , Bangalore
  7. 7. Objective and Scope • Understanding Consumer insights Consumer • Segmentation , Targeting and Marketing Strategy Positioning of green vehicles • Blue print for promoting green vehicles Overall Strategy in emerging markets like India. Indian Institute of Management , Bangalore
  8. 8. Methodology -Study conventional car market -Green car evolution so far Conventional Industry Current cars experts customers -Literature study about green marketing -Understand World scenario -Understand Indian scenario Green car World Focus evolution ecosystem groups -Interview industry experts -Survey current electric car customers -Conduct focus groups for Literature Indian Potential study scenario customers potential customers -Survey potential customers Indian Institute of Management , Bangalore
  9. 9. Findings and Frameworks • Psychology of green consumers • History of electric cars • HEV/EV programs in other countries • Indian scenario and NHPP • REVA customer(54) vs conventional customer(61) analysis • Pros and cons framework (PNC) • Focus group findings (1-8) • Green vehicle ecosystem framework (GVE) • Green customer perceived value framework(GCPV) • Industry expert analysis framework(14) (IEA) • Green vehicle diffusion model (GVDM) Indian Institute of Management , Bangalore
  10. 10. Psychology of green consumers S.No Type Characteristics 1 True blue greens (10%) People with strong environmental beliefs Politically active Contribute money to environmental groups 2 Greenbacks greens (5%) Their willingness to pay for green product is 22% and support environmental concerns Busy in life , not politically active 3 Sprouts (33%) Willing to pay 4% extra Willing to engage in environmental activities if it consumes less time After some time few of them migrate to true blue and greenback greens 4 Grousers (15%) They feel saving environment is responsibility of government They recycle cans and bottles , but grudgingly 5 Basic browns (37%) Not convinced that environment problems are that serious They believe it’s a hype Indian Institute of Management , Bangalore
  11. 11. History of Electric vehicles Indian Institute of Management , Bangalore
  12. 12. HEV/EV programs in countries • USA (California) – ZEV/PZEV – Penalty based enforcement – Lobbying by Oil companies/Auto companies Active – Active - • France Japan Consensual Impositional – Denser city layout – Gasoline – Higher taxes – Nuclear power – Public procurement approach France Reactive - Reactive - California Consensual Impositional • Japan – Earliest promoters (1970’s) – Government + Companies+ Municipalities – Development of quick charging stations – R&D support – Market support • Israel – Better place model ($2300 million invested) – Oil independent by 2020 – 500,000 charging stations by 2011 – Battery swapping mechanisms Indian Institute of Management , Bangalore
  13. 13. Indian scenario • REVA NXG /NXR electric • Toyota Prius hybrid • Tata Indica electric • GM Spark electric • Maruti Suzuki Eeco electric, SX4 hybrid • Hero electric • Mahindra and Mahindra • National Hybrid propulsion program(NHPP) • Ashok Leyland ,Tata Motors ,Maruti Suzuki ,Bajaj Auto Mahindra and Mahindra Indian Institute of Management , Bangalore
  14. 14. REVA customer VS Conventional customer survey analysis Women ~ 50% Men ~ 95% First Value, Senior First Value, then Eco- citizens ~ Middle then friendly 40% aged ~ 90% Comfort Reva Conventional car userConfidential ( Non disclosure agreement ) user car Daily use Working profile Single of Reva ~ profile couple ~ Daily use of car ~ 95% earner ~ 95% 55% 70% Self- Car for Private firm Own 2 cars Leisure employed Trips ~ 60% ~ 55% ~ 70% ~ 20% Reva dissatisfaction Reva NOT good purchase Why GREEN cars? Why not GREEN cars? •Inadequate service •Less space/ too small (30%) •Environment friendliness •Expensive (71%) network (37%) •Not value for money (30%) (69%) •Unproven technology (35%) •Poor build quality (30%) •Less drive range per charge •Low running cost (54%) •Lower performance (18%) •Battery charge problem Confidential(Non disclosure of drive (15%) (22%) •Quality agreement) •Uncertain serviceability (12%) (28%) •Unsafe (17%) •Derisk from petrol prices •Stability issues and poor •High vehicle cost (24%) •Not really eco-friendly (17%) (8%) design (6%) •Poor service quality (11%) •Less maintenance (8%) Indian Institute of Management , Bangalore
  15. 15. Pros and cons framework (PNC) Indian Institute of Management , Bangalore
  16. 16. Total cost of ownership comparison Confidential ( Non disclosure agreement ) Indian Institute of Management , Bangalore
  17. 17. Total cost of ownership comparison Indian Institute of Management , Bangalore
  18. 18. Potential customer focus group analysis Indian Institute of Management , Bangalore
  19. 19. Green vehicle ecosystem framework (GVE) Indian Institute of Management , Bangalore
  20. 20. Green customer perceived value framework(GCPV) Indian Institute of Management , Bangalore
  21. 21. Industry expert analysis framework(14) (IEA) Indian Institute of Management , Bangalore
  22. 22. Green vehicle diffusion model (GVDM) Indian Institute of Management , Bangalore
  23. 23. Discussion and Recommendation • Innovation wheel • Technology VS affordability quadrant • Segmentation , Target , Positioning • Green strategy – Lean Green – Shaded Green – Defensive Green – Extreme Green • Marketing Mix and challenges • Future projections - India Indian Institute of Management , Bangalore
  24. 24. Innovation wheel & Technology VS affordability quadrant More Investment More Better Profits Technology Higher More Sales Demand Lower Costs Indian Institute of Management , Bangalore
  25. 25. Green strategy Product Price Place Promotion LEAN X DEFENSIVE X X SHADED X X X EXTREME X X X X Indian Institute of Management , Bangalore
  26. 26. Marketing Mix and challenges •People: Education and awareness of people •Politics: Lobbying with government for tax subsidy •Process: GREEN alliances. •Proactive planning: changing consumer tastes. •Pace: implement the suggestions as fast as possible. •Publicity: publicize both the makers and the users to increase the diffusion rate of such an innovation. Indian Institute of Management , Bangalore
  27. 27. 11 point Blue Print: Strategy for promoting green automobiles • Green alliance. • Commitment of resources. • Electric vehicle regulation. • Infrastructure - charging points. • Tax reliefs and Subsidy. • Incentives to consumers to change their driving and vehicle ownership behavior. • Education and awareness - Schools and colleges Indian Institute of Management , Bangalore
  28. 28. 11 point Blue Print: Strategy for promoting green automobiles • Segmentation and Targeting of consumers for electric vehicles – Short term (10 years): Women and older people. – Medium term (20 years): Increase consumer adoption rate . – Long term (> 20 years): Develop mature ecosystem mass adoption. • Positioning of the product: – In short term- “Value for money car”. Confidential ( Non disclosure agreement ) – In medium term - “Value for money + eco friendly product” – In long term - “Total eco friendly product”. • Electric cars require electricity – Centralized Nuclear power plant generation systems – Decentralized (standalone) Solar electricity generation systems. • To prove the technology for mass usage and change the consumer behavior to use such products. Indian Institute of Management , Bangalore
  29. 29. How will it eventually happen? 100 Willingness Capability 70 Chance that next person purchasing a Opportunity car will be conventional 0 0 70 100 % of people using conventional cars Indian Institute of Management , Bangalore
  30. 30. Forecast Confidential ( Non disclosure agreement ) Indian Institute of Management , Bangalore
  31. 31. Future scope of work • Analysis of battery industry and its dynamics • Analysis of future power generation systems such as solar and nuclear means. • Hypothesis development and testing. • Article • Book Indian Institute of Management , Bangalore
  32. 32. Thank you for your patience Indian Institute of Management , Bangalore

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